The landscape of global money transfers is being disrupted, fueled by unprecedented individual demand. Growth in cross-border remittances has reached $647 billion, with India, Mexico, and China as the top three recipient countries. According to the World Bank, the average cost of sending $200 is 6.25 percent, more than twice the Sustainable Development Goal target of three percent set by the United Nations Economic Commission for Europe. These costs give consumers pause, as they look for cheaper ways to send money. For those not participating in a traditional financial system – over 1.4 billion adults globally are unbanked – the lack of money transfer lifelines continues the cycle of poverty.

40%

of family members living internationally would not have survived financially without cross-border payment funds

(Mastercard Borderless Payments Report)

Beyond the lifeline of money transfers, more consumers want positive customer experiences – 73 percent say experience as an important factor in purchasing decisions – indicating a direct link between improving service to better business performance (PwC). Not knowing where to start, many companies who want to provide more efficient, integrated cross-border remittance experiences to their customers get stuck in inertia mode due to thinking it’s too hard, too risky, or too far in the future. 

But that barrier is more of a myth than a blocker. Advances in fintech have made cross-border payments not only possible, but simple. It’s time to find opportunities to navigate global change by owning a greater share of the payments process.

Emerging trends in cross-border remittances

Today, digital payments set the expectation that paying for a good or service should be as easy as tapping a screen. We see three trends defining new approaches to remittances:

1. Embedding international remittances within an existing application: Integrating remittance capabilities within web and mobile applications is a convenient way for consumers to make payments. For example, WhatsApp Payments supports instant money transfers between contacts without having to leave the messaging app, eliminating the need to worry about third-party intermediaries and associated costs.
   
   
2. The rise of the gig economy: Online marketplaces and services are reshaping how people work and earn globally. Businesses can tap into this trend by adopting their own payment systems that cater to gig workers' preferences for fast payments from anywhere in the world. Such systems can provide real-time payment (RTP) disbursements and transparent transaction tracking to improve overall satisfaction among gig workers and freelancers.
   
   
3. Connecting with the unbanked and underbanked: Many individuals worldwide lack access to traditional financial services. By bridging this gap, businesses can extend their reach to new markets, enable financial inclusion, and contribute to socioeconomic development. Mobile technology and alternative payment methods connect with these previously untapped, and underserved, customer segments.

The demand for faster, customizable, and accessible payment methods has sparked a new wave of technology solutions, led by embedded finance and banking-as-a-service (BaaS).

Embedded finance use cases

Embedded finance and BaaS allow the integration of cross-border payments solutions into existing customer applications. These services enable businesses to incorporate banking functions, such as international fund transfers, currency exchange, and real-time transaction tracking directly into their technology stacks, operational workflows, and customer-facing applications. This allows businesses to fully own the flow of funds, and maintain control over the user experience. Here are a few use cases across segments that have integrated embedded finance into non-financial applications:

• Retailers: Seeking ways to expand global reach, retailers are adopting cross-border solutions that enable international customers with convenient payment options, including real-time currency conversion and fast remittances. Through international money transfer capabilities embedded into existing mobile apps, retailers empower individuals who lack access to traditional banking facilities on a global scale, amplifying interactions with existing products and services. By reducing user experience barriers and processing delays, embedded finance makes cross-border purchases more cost-effective while fostering customer loyalty and driving higher sales.
  
  
• Online marketplaces: integrated payment gateways and efficient currency exchange ensure hassle-free cross-border transactions within the marketplace. This simplifies the buying experience for customers, reduces payment friction for sellers, and enhances overall marketplace competitiveness.
  
  
• Large, global employers: Companies with global teams are increasingly adopting embedded finance solutions to pay international employees, freelancers, and gig workers swiftly and securely. These solutions offer real-time cross-border payment capabilities, allowing employers to disburse pay directly to workers' accounts in their local currencies, reducing or eliminating intermediary delays and costs. Embedded finance simplifies the payroll process to ensure timely and accurate salary disbursals, streamlining payroll operations, fostering strong relationships with international employees.
  
  

The future: Own and control global money transfers

The momentum behind global money transfers is steering businesses toward embedding solutions into existing workflows. This is not just a strategic choice, it's a pivotal step toward achieving financial agility, customer satisfaction, and competitiveness in an increasingly interconnected world. The Alviere HIVE platform provides a comprehensive set of financial products, designed to integrate into current operations, to deliver faster, cost-effective, and user-friendly cross-border transactions. To learn more about challenges, trends, and opportunities in international money movement, read Rethinking global money transfers: Why enterprises adopt their own cross-border payments solutions. For more information about the solutions described above and how Mexican retail giant Coppel uses Alviere, see Cross-border Remittances.